Common types of business attorneys for small businesses
Hiring a business attorney for your small business can be expensive, so it’s tempting to forego hiring one until your company becomes profitable. But if you ever face a lawsuit or need legal counsel, you’ll be happy to have an attorney available because they can help you navigate the legal system.
In this article, you’ll learn the different types of business attorneys you may need and tips for choosing the right one for your small business.
How can a business attorney protect your company’s interests?
Although hiring a business attorney is costly, you should consider it as important as any other initial costs. A lawyer can save you a lot of money and time later on and help protect your company in the following ways:
- An attorney can help you choose the best business structure for your company.
- Business attorneys can ensure you comply with all local, state, and federal laws.
- They can represent your business in the case of a lawsuit and mitigate any damages.
- A lawyer can strongly support you throughout any conflicts or incidents you might face.
- Attorneys can guide you through the complicated employment process and create strong contracts.
The different types of business attorneys
As a small business owner, you’ll likely be affected by many different areas of law. No one business attorney will be an expert in all situations, so you may need to hire a specialized attorney in addition to a general business attorney.
We’ve compiled a list of types of attorneys you may need. Many of these can be hired as needed, so you do not need to keep multiple attorneys on retainer, which is an amount paid upfront to secure a lawyer’s services.
1. General business
A general business attorney is likely the lawyer you’ll most often work with. They represent their clients in a wide range of legal cases and work in multiple areas of law.
You’ll often call your general business attorney first when your business faces common legal issues. Often, they can help you because they have broad experience with common problems. Sometimes, though, your general business attorney may recommend hiring a more specialized attorney.
Responsibilities include:
- Providing counsel on a vast range of legal matters, including contracts and regulatory compliance
- Helping you decide on the most appropriate business structure for your company
- Ensuring smooth daily operations by confirming your business works within the scope of local, state, and federal law
2. Labor and Employment
You’ll likely need a labor and employment attorney when you start hiring workers for your small business. They can help you create employment processes, ensure you comply with state and federal laws, and deal with any issues related to the workplace. Employment laws change regularly, so keeping a labor and employment attorney on retainer can ensure you remain compliant.
Responsibilities include:
- Assisting with legal issues between you and an employee
- Interpreting and advising you on wage and hour laws, workplace safety, disability and leave requirements, workplace harassment and discrimination, and wrongful termination suits
- Creating employment contracts, employee handbooks, and hiring and firing processes
3. Mergers and acquisitions
Buying or selling a small business can be an extremely complex process. A mergers and acquisitions (M&A) lawyer can help you successfully navigate the process and negotiate the deal.
Responsibilities include:
- Drafting, negotiating, and executing contracts for the sale of a business
- Defending your interests throughout the process
- Documenting the sale and ensuring all paperwork is filed correctly
To learn more about an M&A attorney, read “What does a mergers and acquisitions attorney do?”
4. Contracts and transactions
If your small business needs a contract for any reason, it’s possible that you can use an online template. However, this can open you up to problems and lawsuits because you’ll be obligated to fulfill the contract, even if you’re unsure what a clause means. Additionally, contract templates will not cover your specific needs.
A contracts and transactional law attorney can create contracts tailored to your company’s needs. They can also represent you in the case of a lawsuit regarding a particular contract.
Responsibilities include:
- Planning, drafting, negotiating, and executing transactions between your business and another individual or entity
- Helping you recover damages or mitigate liabilities in the event of a breach of contract dispute
5. Tax
Business taxes can be highly complex, and a certified public accountant (CPA) can help you handle them. But a tax attorney can also be helpful if tax authorities take legal action against your business. You might need a tax attorney if you filed your taxes incorrectly, either because you did not hire a CPA or because your CPA was incompetent.
Responsibilities include:
- Trying to mitigate damages related to tax issues
- Representing you in disputes with tax authorities
- Advising you on the tax implications of property acquisitions, business transactions, and different types of business structures
6. Workers’ compensation
If your small business hires workers, you may be required to carry workers’ compensation insurance. Workers’ compensation insurance provides partial medical care and income protection if an employee is injured on the job. Even with adequate insurance, one of your staff members may sue you if they’re harmed at work.
A workers’ compensation attorney understands workers’ compensation laws and regulations and can help protect you in the event of a lawsuit. If you hire one before you need workers’ compensation insurance, they can help you avoid these lawsuits in many instances.
Responsibilities include:
- Helping you understand your rights and obligations as an employer
- Reviewing documents related to your workers’ compensation insurance
- Providing legal advice on your current workplace policies and procedures to mitigate your chances of being sued
- Representing you during a lawsuit and helping you overcome false workers’ compensation claims
7. Intellectual property
Intellectual property (IP) refers to any creation of the mind. IP includes patents, trademarks, copyrights, and trade secrets, which are all valuable assets to your company. An intellectual property attorney can help protect your IP and ensure that no one infringes on your patents, trademarks, etc.
An IP attorney can also represent you if you’re accused of infringing on someone else’s intellectual property. IP violation lawsuits can have extremely high payouts, and an intellectual property attorney can help mitigate damages.
Responsibilities include:
- Drafting, negotiating and advising you on agreements and contracts related to IP, including licensing, non-disclosures, and more
- Determining whether a product or invention can be patented and filing the paperwork required to obtain those patents
- Counseling you on the best way to protect your IP
- Registering a trademark or copyright on your behalf
- Enforcing your intellectual property rights against infringement and ensuring you’re not infringing on someone else’s IP
8. Business disputes and litigation
Conflicts can arise from many different aspects of your business, and a business litigation attorney can represent you in the case of a lawsuit. They can manage these disputes both in and out of the courtroom.
Responsibilities include:
- Managing disputes arising from contracts, business partnerships, shareholders’ concerns, disgruntled employees, and more
9. Corporate finance
Corporate finance law refers to the legal rules regarding how a company can obtain funds to finance its operations. A corporate finance attorney can help you determine how to raise funds and ensure you follow the law.
Responsibilities include:
- Determining the best way to finance your company in accordance with your state’s laws
- Helping you choose the best business structure
10. Bankruptcy
If your small business has gone deep into debt and is struggling with finances, it might be time to file for bankruptcy. A bankruptcy attorney can advise you on whether you should file for bankruptcy and the best way to do so. They are experts in U.S. Bankruptcy Code and can represent you throughout the process.
Responsibilities include:
- Advising you on your options and helping you file for bankruptcy
- Using the court system to reduce or eliminate your company’s debts
- Navigating solutions for financial restructuring, plan confirmations, and valuation disputes
Highly-specialized business attorneys
Sometimes, you may need to hire a highly-specialized lawyer. This may be the case if you work in certain industries or your small business needs help to navigate particular legal issues.
Specialized industries
Some industries are subject to strict regulations and often face legal issues that a general business attorney does not have the experience to handle.
- Entertainment lawyers work in the film, music, and television industries. They can help you with contracts, copyrights, and more. They may also represent you in negotiations with studios, agents, or other entertainment professionals.
- Sports attorneys represent athletes, teams, leagues, and other sports organizations. They can execute player and team contracts, resolve labor and contract disputes, and negotiate sponsorship agreements.
- Cannabis attorneys specialize in helping cannabis companies apply for licenses. They can also help ensure that you’re compliant with the laws of your state and city.
- Healthcare lawyers specialize in medical law and may be crucial if you own a medical practice or other business in the medical field.
- Fintech attorneys advise and assist financial technology (fintech) companies and financial institutions.
- Cryptocurrency lawyers work with any blockchain-related business and understand cryptocurrency-related legal issues. They can advise you on registration requirements, anti-money laundering issues, and other compliance issues.
Specific situations
Sometimes, your small business may face a situation that requires a more specialized attorney.
- Insurance attorneys typically protect you throughout an insurance claim and can help you navigate business liability claims. They can also negotiate a settlement or litigate bad-faith cases in court.
- Class action lawyers can help you navigate a class-action lawsuit, which is when an entire class of people sues a company. They can also help you reach a settlement if required.
- Attorneys specializing in government contracts can help you negotiate contracts if you want to work with your local, state, or federal government.
Factors to consider when choosing the right business attorney for your small business
Ideally, you’ll select a business attorney before facing a legal issue requiring one. If you wait until you need a lawyer, your decision will be rushed to resolve the issue as quickly as possible.
Here are a few factors to consider when choosing a business attorney for your company.
Experience and expertise
When hiring an attorney, you want an expert in the field with a strong history of success. Ask them about their experience to ensure they can help your business in the areas you’ll need.
You’ll also want to examine whether they’ve represented other clients in your industry. If the attorney has, they’ll be able to help you without you necessarily explaining your business model and what you might require of them.
Fee structure and billing
You’ll need to ensure you can afford a business attorney’s services. Most lawyers will bill you by the hour, but some have started to charge set amounts for predefined services. When interviewing potential attorneys, ask them about their billing structure and find the one that best fits your needs and budget.
Communication style
Not only do you need to find an attorney you can afford, but you also need to find one that you get along with. Your business attorney will also need to be able to explain complicated legal matters to you in a way you understand.
You’ll also want to consider their preferred communication method. Some matters only require an email, while others may need an in-person meeting. Your attorney should know when each way is best so as not to waste your time and money.
Tips for working effectively with a business attorney
Once you’ve selected the right business attorney for your company, you want to use your time with them wisely. Consider these tips to help you work effectively with your business attorney.
Listen to your business attorney
You may have well-meaning friends, family members, and business associates advising you on legal matters. But your business attorney has a legal education and experience. So if they offer you advice, don’t shrug it off. Remember, they have your company’s best interests in mind.
Provide relevant information
A lawyer can represent you best when they understand your business and have all pertinent information related to your legal matters. When meeting with your business attorney, organize any documents they may need in advance to ensure they can easily find the information they need. You can also keep your lawyer in the loop by copying them on any updates to your partners and holding regularly scheduled monthly meetings.
Define your goals
Before meeting with your business attorney, ensure you clearly understand what you want to accomplish. This will ensure that you make the best use of your time and that your business attorney is the right person for the job.
Manage your expectations
A lawyer cannot fix all of your business’s problems because they must follow the law and the facts of the case. An honest business attorney will give you a realistic idea of whether you will achieve your legal objectives.
Communicate
It’s crucial that your attorney be available to return calls and emails relatively quickly, and it’s vital that you also return any communication promptly. If you don’t, your business attorney may have to look to other sources for necessary documentation or explore more expensive avenues to answer a question about your business.
Is a business attorney essential?
Because hiring a lawyer can be expensive, you might think you don’t need one until your small business is sustainable and profitable. However, a business attorney can help ensure that you’ve taken care of all your legal responsibilities, which could save you money in the future.
Additionally, there may be times when it’s in your best interest to hire a specialized attorney to navigate particular situations. For example, if you’re ready to sell your business, you may want to hire a mergers and acquisitions attorney. For more information, read our article “Do you need an attorney to sell a business?”